Mission Focused: Making the Case for Expanding Public Power

“Whose electricity bill was over $100?” was the moderator’s question.

Hands shot up in the audience at Manny’s, a café and event space in San Francisco’s Mission District that focuses on topical public policy conversations.

“Can I get $200?” asked Precious Green, the Director of Community & Partnerships and house moderator at Manny's, doing her best impersonation of an auctioneer.

“Now you sound like PG&E,” quipped Barbara Hale, the SFPUC’s Assistant General Manager for Power.

Heads nodded. Knowing murmurs rippled through the audience. And the stage was set for a thoughtful public discussion with Hale this week about where San Francisco gets its electricity from and the challenges our city faces as a shambling PG&E throws up roadblocks to affordable housing and other public projects while wringing customers with rate increases to line its investors’ pockets.

In the fireside-chat-style conversation with Green, Hale explained to the dozens of people in attendance where San Francisco gets its electricity from, why our power rates are cheaper than PG&E’s, and why we want to buy the investor-owned utility’s grid in San Francisco so that all of our residents and business will get the benefits of public power.

As Hale explained, the San Francisco Public Utilities Commission already provides more than 70% of the electricity used in San Francisco through a combination of power that we generate ourselves with our Hetch Hetchy Power system and power that we buy through our CleanPowerSF community choice aggregation program.

Both sources are renewable and notably cleaner than PG&E’s.

“The water that you drink creates electricity,” Hale noted. “We put our water to work for you.”

Additionally, San Francisco’s community choice aggregation program, which allows cities and other municipalities in the state to source their own electricity, is “recognized as one of the cleanest ones in the nation,” Hale noted.

We have long-term contracts with solar and wind energy providers, and we’ve finalized a long-term geothermal energy deal as well. Battery storage to hold renewable energy for times when the sun isn’t shining or the wind isn’t blowing is a growing part of our energy portfolio.

CleanPowerSF serves about 385,000 customer accounts in San Francisco and offers 60% and 100% renewable electricity service options. Over the past eight years, CleanPowerSF has helped reduce greenhouse gas emissions from electricity use by 93% from 1990 levels.  

Along with CleanPowerSF, the SFPUC operates Hetch Hetchy Power, which generates and delivers 100% greenhouse gas-free energy to more than 6,500 customer accounts, including municipal facilities, such as City Hall, San Francisco International Airport, schools, libraries and the Muni transit system. Hetch Hetchy Power also provides electricity to some commercial and residential developments, including at the Ferry Building and Transbay Transit Center, as well new neighborhoods being built along the eastern waterfront, like Pier 70 and Mission Rock.

$120 Million Saved

Our power is cleaner than PG&E’s, we are more reliable, and our rates are cheaper. In fact, our Hetch Hetchy customers alone saved $120 million last year compared to what they would have been paying if they were with PG&E, Hale noted.  

Part of the reason is that we are a not-for-profit public utility. We don’t have to pay the taxes that for-profit utilities like PG&E do, and we don’t have to make a profit to pay off investors or provide executives with multi-million-dollar pay packages. Instead, our earnings are used to keep rates lower and to reinvest in the system to ensure safety and reliability, Hale said.

“I think the individuals here would love to have you running our power,” Green said.

While the SFPUC already produces and buys clean and more affordable power, the problem is PG&E owns the electric grid in San Francisco. It effectively has a monopoly on that last-mile connection for most San Francisco homes and businesses.

“Right now, we don’t have enough control to bring (those benefits) to all San Franciscans,” Hale said.

That is why the City, including the SFPUC, City Attorney’s Office, Planning Department and others, are working hard to purchase PG&E’s electric grid in San Francisco.

We have already made an offer of $2.5 billion, which PG&E claims is too low.

So, San Francisco is now before the state utility regulator, the California Public Utilities Commission, to get an independent determination of the fair market value of PG&E’s grid that serves the City.

“Our ideal outcome is to have a business-like transaction with PG&E” to ensure the smoothest transition, Hale said.

Simultaneously, the SFPUC is also conducting environmental review under the California Environmental Quality Act for that public power expansion project.

How Do You Pay for It?

One audience member asked where the money would come from, suggesting it could affect other city priorities.

Hale, though, explained that the money to purchase the electric grid would not come from existing money in City coffers like the General Fund. Instead, the City would borrow the money for the acquisition using revenue bonds. Those bonds would be paid back over time from the money that comes in from people paying their electrical bills.

So the acquisition wouldn’t affect any other City spending. The money for the purchase is money the City would get only for that purpose, and it couldn’t be used on anything else.

The SFPUC has crunched the numbers, including how much we would have to borrow, how much we would need to keep in reserve, the amount needed for continuing operations and maintenance, and funds for investments in capital improvements.

All of that can be done for less than what PG&E is charging customers.

“We’ve done the math,” Hale said. “If we didn’t see a pathway to charging San Franciscans less (than PG&E), we wouldn’t have recommended (this). … We see a pathway for San Franciscans to pay less. Paying their electric bill pays back all of those costs.”

Hale encouraged people seeking more information about the public power expansion work to sign up for updates at publicpowersf.org.